Business Highlights

Five and a half years after the start of a frightening drop that erased $11 trillion from stock portfolios and made investors despair of ever getting their money back, the Dow Jones industrial average has regained all the losses suffered during the Great Recession and reached a new high. The blue-chip index rose 125.95 points Tuesday and closed at 14,253.77, topping the previous record of 14,164.53 on Oct. 9, 2007, by 89.24 points.

The new record suggests that investors who did not panic and sell their stocks in the 2008-2009 financial crisis have fully recovered. Those who have reinvested dividends or added to their holdings have done even better. Since bottoming at 6,547.05 on March 9, 2009, the Dow has risen 7,706.72 points or 118 percent. The Dow record does not include the impact of inflation. Adjusted for that, the Dow would have to reach 15,502 to match its old record.

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US stock market isn't the only one racing ahead

LONDON (AP) â¿¿ U.S. stocks are not alone in racing ahead this year. Many markets in Europe and Asia are trading at multi-year highs, too, in part because of Wall Street's rally.

The advances in some places have been surprising, given paltry levels of economic growth around the world. Britain's FTSE 100, for example, enjoyed its best January since 1989 with an increase of more than 6 percent even though the British economy has one foot in another recession.

Many explanations have been given for 2013's roaring start, notably the relief over a U.S. budget agreement that avoided sending the world's largest economy over the "fiscal cliff" of automatic tax increases and spending cuts that threatened to drag it back into recession. Several other factors are also at play: The future of the euro appears more secure than it has been for much of the past three years. There are rising hopes that Asia will give global growth another lift. The slowdown in China, the world's No. 2 economy, seems to have leveled. And a new government in Tokyo has made revival of the moribund Japanese economy its top priority.

But nagging doubts persist, leading some to conclude that the prosperity is too good to be true.

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US power grid costs rise, but service slips

NEW YORK (AP) â¿¿ America's power grid is like an old car.

It gets the job done, even if its performance is slipping. But the repair bills go up every year and experts say only a major overhaul will reverse its decline.

An Associated Press analysis of utility spending and reliability nationwide found that electric customers are spending 43 percent more than they did in 2002 to build and maintain local electric infrastructure. Since then, power outages have remained infrequent; but when the lights do go out, it now takes longer to get them back on. Neither the spending nor the reliability trends are dramatic on their own. But experts say the combination is revealing: it suggests that the extra money from electric customers isn't being spent wisely â¿¿ or that utilities aren't investing nearly enough to upgrade fragile equipment that is increasingly threatened by major storms.

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Martha Stewart denies wrongdoing in Penney deal

NEW YORK (AP) â¿¿ Home decor and food guru Martha Stewart testified in court on Tuesday that she did nothing wrong when she signed an agreement to open shops within most of J.C. Penney's stores across the country.

Stewart testified in New York state court in a trial over whether the company she founded breached its contract to sell cookware, bedding and other items exclusively at Macy's when she inked the deal with Penney. During three hours of testimony, Stewart, who founded Martha Stewart Living Omnimedia Inc., denied Macy's allegations that she did anything unethical and said she was only looking to expand her brand.

In fact, Stewart said it's Macy's that didn't uphold its end of the agreement to try to maximize the potential of her business. She said her brand had grown to about $300 million at Macy's, but the business was now "static" at the department store chain. She said she had hoped the business would exceed $400 million.

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Natural gas vehicles making inroads; sales rising

DETROIT (AP) â¿¿ Ford Motor Co. said Tuesday it sold a record 11,600 natural gas vehicles last year, more than four times the number it sold two years ago.

It's the latest sign that natural gas is making inroads as a transportation fuel, particularly for truck fleets, buses and taxis. The consumer market is tougher to crack, but sales are gaining there as well.

Natural gas is cheap and plentiful in the U.S. after a spike in production that began in the middle of last decade. At the same time, the price of gasoline and diesel fuel has jumped more than 30 percent. That makes natural gas â¿¿ which also emits fewer greenhouse gases â¿¿ an increasingly attractive option for truck companies and municipalities.

But while natural gas may be a good choice for snow plows and trash trucks, which go relatively short distances and can refuel at city-owned pumps, it's a tougher call for ordinary consumers. Natural gas cars cost more and there are few public places to refuel them. Those issues need to be addressed if the vehicles are to significantly boost their share of the auto market, which is currently less than 1 percent.

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US service firms grows at fastest pace in a year

WASHINGTON (AP) â¿¿ U.S. service companies grew in February at the fastest pace in a year, buoyed by higher sales, more new orders and solid job growth. The gain suggests higher taxes have yet to slow consumer spending on services.

The Institute for Supply Management said Tuesday that its index of non-manufacturing activity rose to 56 in February from 55.2 in January. Any reading above 50 indicates expansion.

The report measures growth in industries that cover 90 percent of the work force, including retail, construction, health care and financial services. A solid recovery in the housing market helped drive the index higher.

Service firms also kept adding jobs last month. A measure of service-sector hiring fell only slightly after reaching a nearly seven-year high in January.

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Carmakers don't see European recovery this year

GENEVA (AP) â¿¿ It is still a tough time to be a European carmaker. Profits are falling as idle factories produce more costs than cars. And fewer consumers are buying new cars.

Despite the gloom, automakers began the rollout of new models at the Geneva Motor Show on Tuesday, from a pair of hybrid supercars to a sedan to a raft of smaller SUVs. All done in an attempt to lure buyers back - or at least capture their imaginations. But Europe's carmakers are finding it harder to recover from the collapse of the car market in 2008 than some of their rivals in the U.S. and Asia. Europeans are buying fewer new cars as their economies grow weakly, or not at all.

New car registrations in Europe dropped 8.5 percent in January - more than anyone was expecting - and that is on top of a decline of 7.8 percent overall last year to 12.5 million units. Even bedrock Germany, the engine of Europe, was suffering: sales were down 9 percent in January and 10 percent in February, putting Europe's largest economy and home to some of the continent's most important mass market below the 3 million mark.

Auto executives are split over when the European car market will bounce back - or whether it will happen at all. Ford Europe's Stephen Odell and Renault's Ghosn put it at least three years out.

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Telecommuting: Was Yahoo doing it right?

NEW YORK (AP) â¿¿ Yahoo's leaked edict under CEO Marissa Mayer that calls remote workers back to the office lit the Twitterverse on fire, angering advocates of telecommuting and other programs intended to balance work and home life.

A new study from the nonprofit Families and Work Institute shows a tide moving the other way, with more workers now telecommuting â¿¿ and men significantly more likely than women to be granted the freedom to work at least partially at home. Left mostly unanswered is the question Mayer appears to be dealing with: Is that a good thing? Or has the rise in telecommuting led to a drop in productivity or creativity?

"If you don't know where your people are and what they're doing, then you haven't implemented properly, so she's got her hands full," said Kate Lister in San Diego, Calif., co-founder of Global Workplace Analytics, which collects data on the subject for its Telework Research Network.

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US home prices rose by most in nearly 7 years

WASHINGTON (AP) â¿¿ U.S. home prices jumped in January, a sign the housing market is gaining momentum as it nears the spring selling season.

Home prices rose 9.7 percent in January from a year ago, according to data released Tuesday by CoreLogic. That's up from an 8.3 percent increase in December and the biggest annual gain since April 2006. Prices rose in all states except Delaware and Illinois. And prices increased in 92 of the 100 largest metro areas, up from 87 in December.

Home prices also rose 0.7 percent in January from December. That's a solid increase given that sales usually slow over the winter months.

Rising demand combined with fewer available homes is pushing up prices. Sales of previously owned homes ticked up in January after rising to their highest level in five years in 2012, according to the National Association of Realtors. At the same time, inventories of homes for sale fell to a 13-year low.

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Celebrity 'fractivists': True advocates or NIMBYs?

NEW YORK (AP) â¿¿ The scene: a Manhattan art-house theater. The cause: a campaign against the gas drilling process known as fracking that's being led by more than 100 celebrities, including Yoko Ono, Sean Lennon, Robert Redford, Mark Ruffalo and Mario Batali.

Outside, demonstrators in hazmat suits circle the theater. Inside, actress Scarlett Johansson attends a benefit screening of "Gasland," the documentary film that has become the movement's manifesto. Johansson tells The Associated Press that her "Avengers" co-star Ruffalo introduced her to the cause, and that she found the film "incredibly shocking."

The campaign has galvanized hundreds of thousands of followers, but as with many activist causes, the facts can get drowned out by the glitz. Now, some experts are asking whether the celebrities are enlightened advocates or NIMBYs â¿¿ crying "Not in my backyard!" â¿¿ even as their privileged lives remain entwined, however ruefully, with fossil fuels.

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Storm halts Midwest flights, heads for Washington

A late-winter storm barreled through the Midwest, snarling air travel in and out of Chicago, and it will soon take aim at busy airports around Washington, D.C.

By late morning Tuesday, more than 1,200 flights had been canceled, almost all at Chicago's O'Hare and Midway airports. The airlines were already looking one day ahead and cutting flights in the storm's path.

They had already canceled about 450 flights on Wednesday, mostly at Dulles and Reagan National airports in the Washington area, according to FlightAware.com. Daniel Baker, CEO of the flight-tracking service, said he expected the numbers to rise.

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China plans for slower, consumer-driven growth

BEIJING (AP) â¿¿ Premier Wen Jiabao on Tuesday pledged to transform China into a consumer-driven economy but gave no indication what Beijing will do about big state companies that reformers warn could handicap future growth.

Wen, speaking to China's ceremonial legislature, confirmed a 7.5 percent growth target in an annual economic plan. That is below the double-digit rates of the past decade but in line with Communist Party plans for a rebalancing of the world's second-largest economy away from reliance on trade and investment to drive growth.

Wen steps down next week after 10 years as China's top economic official but the goals he announced are part of a long-range plan incoming leaders under the newly installed party general secretary, Xi Jinping, are expected to adhere to.

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EU pushes ahead with bonus cap despite UK concerns

BRUSSELS (AP) â¿¿ Britain stood isolated against a broad majority of European Union countries Tuesday in refusing to back legislation that would strictly limit bankers' bonuses.

Treasury Chief George Osborne said at a meeting of the bloc's 27 finance ministers in Brussels that Britain, home to one of the world's largest financial industries, can't support the current proposal to limit bonuses. The UK fears the cap would drive banks to set up outside Europe in the U.S. or Asia.

But Irish Finance Minister Michael Noonan, who chaired the ministers' meeting because his country hold the rotating EU presidency, concluded there is a "broad majority" in favor of the legislation. This gives the necessary green light for finalizing technical details toward a formal vote on the package by the ministers next month.

The bonus cap is part of a sweeping 1,000-page package of financial laws that will require banks to hold more capital and liquidity reserves from next year. This is designed to shield taxpayers from having to pay for any more expensive bailouts. Those rules will implement the internationally agreed Basel III rules on banks' capital buffers and will also lay the groundwork for a single banking supervisor for the group of 17 European Union countries that use the euro.

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By The Associated Press(equals)

The Dow Jones industrial average closed at an all-time high of 14,253.77, up 125.95 points, or 0.89 percent. The Standard & Poor's 500 index rose 15 points, or 1 percent, to 1,539.79, within striking distance of its own record close of 1,565. The Nasdaq composite gained 42 points, or 1.3 percent, to 3,224.13.

Benchmark oil for April delivery rose 70 cents to finish at $90.82 a barrel on the New York Mercantile Exchange. Brent crude, used to price many kinds of oil imported by U.S. refineries, gained $1.52 to end at $111.61 a barrel on the ICE Futures exchange in London.

Wholesale gasoline added 5 cents to finish at $3.15 a gallon. Heating oil rose 5 cents to end at $2.97 a gallon. Natural gas was flat at $3.53 per 1,000 cubic feet.

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